What are Binary options?

Binary options are financial derivatives that can be traded in various markets. They are straightforward and popular due to their "all or nothing" nature, where the potential profit or loss is predetermined before the trade is executed. These options have only two possible outcomes, which is why they are called "binary."

How do Binary Options Work?

To understand how binary options work, traders need to predict whether the price of the underlying asset will be above or below a predetermined value at the expiry time. If their prediction is correct, they can earn substantial profits by capitalizing on price fluctuations in global markets. However, it's crucial for traders to fully comprehend the two opposing outcomes before engaging in binary trading as it involves either a predetermined cash amount or nothing at all when the option expires. Unlike other types of options, a binary option doesn't grant the holder the right to buy or sell the underlying asset. Once acquired, the binary option automatically exercises without any further decisions for the holder. Some binary options are traded on registered exchanges or designated contract markets under the oversight of regulatory bodies like the SEC in the United States.

What is DeFi?

DeFi, short for decentralized finance, is a revolutionary system that grants unrestricted access to financial services. It accomplishes this by adapting the conventional financial tools into the realm of cryptocurrency, employing blockchain technology, particularly Ethereum, for the distribution, recording, and storage of value. In traditional finance, transactions involving money necessitate intermediaries like banks or stock exchanges. Trust in these intermediaries is crucial for secure and reliable transactions. However, in DeFi, these intermediaries are replaced by software. People can directly trade with one another through blockchain-based "smart contracts," which handle market creation, trade settlement, and guarantee the fairness and trustworthiness of the entire process. DeFi encompasses various features such as lending platforms, prediction markets, options, staking, and derivatives. An essential aspect of DeFi markets is transparency, as the code is accessible for anyone to review. Stablecoins like USDT and USDC play a vital role in DeFi markets. They provide stability to crypto investors, eliminating the need to frequently convert tokens to dollars or hold assets in volatile cryptocurrencies. Instead, stablecoins behave like a consistent, unchanging dollar, allowing users to utilize them without interacting with the traditional financial system.